Businesses Suffer as Orange County Board Grapples With Funding

While the Orange County Board of Supervisors decides how to allocate federal relief money, local businesses desperate for assistance are fighting to survive.

Katia Bagatta learned how to prepare meals from her hardworking, immigrant parents in their Laguna Niguel, California, restaurant. In 2008, she finally opened a restaurant of her own, Bistro K, in the same city.

On May 19, Bagatta pleaded in front of the Laguna Niguel City Council to allow her restaurant to reopen, following its forced closure by the state’s March 19 stay-at-home mandate. With high rent, payroll, and expenses building, Bagatta is eager to reopen before she loses her business.

“We immigrated to this country in 1980 to enjoy the freedom America has to offer,“ she told them. “I feel like we’ve all sacrificed enough, and it’s time to start getting business rolling again.”

On the same day, the Orange County Board of Supervisors debated in Santa Ana how to allocate $101 million of the $554 million the county received from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Two opposing plans designed to help small businesses were discussed, but neither were approved—leaving the fate of many businesses like Bagatta’s up in the air.

Katia Bagatta and her father cook up a meal inside Bistro K restaurant in Laguna Niguel, Calif. (Courtesy of Katia Bagatta)Katia Bagatta stretches her arms while standing behind her father and employees at Bistro K restaurant in Laguna Niguel, Calif. (Courtesy of Katia Bagatta)

A Concerned Restaurant Owner

“I feel like my freedoms have been taken away to be able to feed my family,” Bagatta told The Epoch Times. “It’s very disheartening to not know what your rights are … especially when you feel like you’ve done the right thing your whole life.”

Like many other business owners, Bagatta’s debts are mounting. Though she laid off five employees, she is still paying 16 others. The restaurant is still open for takeout, but neighbors have complained to the health department about the waiting customers, making her “feel like a criminal.”

Bagatta said she’s known many of her customers for years. A dozen patrons have given her thousands of dollars to help cover expenses. One customer even bought $4,000 in Bistro K gift cards.

“I’ve been fighting for my PPP [Paycheck Protection Program] money,” Bagatta said, referring to a Small Business Administration loan that was part of the original CARES package.

Initially, she thought she would receive $80,000—but the actual number dwindled to half of that. She said the $40,000 would be gone in six weeks.

“Not only are we behind in rent, but we’re behind obviously in payroll, and these people need to make money,” she added. She will owe $50,000 by July 1, she said, including deferred sales tax.

Laguna Niguel Mayor Laurie Davies told The Epoch Times she supports opening as soon as possible, since she’s a business owner herself. She runs her own weddings and events company.

Her constituents have been “on the phone crying,” she said, telling her they “can’t survive this much longer” and “we can’t afford to pay rent.”

“I’ve had a business for 30 years and it’s going to go down,” one owner told her.

Davies was one of 31 Orange County mayors who submitted a joint letter on April 16 to the Board of Supervisors, requesting that the county secure funding from the CARES money and quickly allocate it to cities based on their population.

The Board Votes

At the May 19 Board meeting, Supervisor Don Wagner and Chairwoman Michelle Steel proposed a business recovery program that would allocate $75 million directly to the county’s cities. The plan was backed by the 31 mayors who signed the letter.

Vice Chairman Andrew Do and Supervisor Lisa Bartlett supported the HEART Plan, which would distribute the money evenly among the county’s five districts.

HEART stands for: Help for small businesses; Expenditures to support communities; Assistance to nonprofits; Reimbursement to Orange County cities; and Temporary food assistance.

“It provides for a more equitable way to get the funding out to really help the small businesses,” Bartlett said. “The cities are separate. I want to make sure that all of our small businesses are taken care of.”

Following a handful of public comments, the Wagner-Steel proposal was shot down by a 3-2 vote. By the same vote, the board opted instead to have county CEO Frank Kim draw up a new plan that would allocate $75 million of relief funds directly to businesses and nonprofits.

“We want to help businesses not only in the short term, but long term as well,” Bartlett said. She also cited the need to deal with a recession, and the possibility of leveraging the money to get additional loans.

The board unanimously approved $26 million of the CARES Act money for distribution to the county’s cities, to help with costs related to the COVID-19 pandemic.

“I am beyond disappointed by the unnecessary delay in dispersing funding to our cities,” Wagner said in a press release. “Local leadership wanted this funding, the businesses wanted it, and the people wanted it.”

Wagner said he still plans to give $15 million to the cities in his district. “I want the Mayors in my district to prepare for the receipt and disbursement of the stimulus money,” he said.

“We’re very disappointed it didn’t go through,” said Davies.

OC Mayors Perturbed

Mayor Christine Shea of Irvine told The Epoch Times she’s “very disturbed” by the meeting’s outcome. “We have people that are out of work and suffering,” she said.

Some board members are out of touch, she added, because they have $180,000 salaries, perks, and car allowances.

“We have supervisors in our county that don’t understand the immediate need and impact that residents are feeling,” she said. “I am just appalled that our Board of Supervisors have received $550 million of federal money that came to the state, and they literally want to take time to think about how they’re going to help businesses out.”

Santa Ana Mayor Miguel Pulido also supported the Wagner-Steel plan. He said businesses are suffering more than ever.

“We’ve never had to face anything like this, and I’ve been through the Orange County bankruptcy back in 1984,” Pulido told The Epoch Times.

Pulido, who has been mayor since 1994, called the economy the “fundamental fabric” of society, adding “this is also an economic pandemic.”

For Bagatta, the current situation reminds her of the 2008 recession, when she was just starting out.

“It was a horrible time. We were in such bad debt,” she said. “We live in the best country in the world, but lately I am very confused about what my freedoms are and what my legal rights are.”